If a company reporting on a calendar year basis, paid $18,000 cash on January 1 for one year of rent in advance and adjusting entries are made at the end of each month, the balance remaining in Prepaid Rent on December 1 should be $1,500.

Question

Quizplus · Accepted Answer

The company pays $18,000 for one year of rent, which is $1,500 per month. By December 1, 11 months have passed, so $16,500 has been expensed, leaving $1,500 in Prepaid Rent.

If a Company Reporting on a Calendar Year Basis, Paid